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Mr Hammond also said the UK would probably seek “enhanced” equivalence with the EU because the equivalence the EU offers to companies in the US is “asymmetric and unilateral” and can be withdrawn.

He said: “This would not be a basis on which to offer a financial services business.”

Mr Hammond appeared alongside Katharine Braddick, HM Treasury’s director general for financial services, who said she is aware of some of the deadlines facing financial services firms.

She said: “The firms that are progressing their relocation planning most urgently are international banks that use the UK to serve their EU clients.

“Those firms have been planning for some time. They have had a number of decision points for progressing those plans but those plans harden at the point at which they start to alert contractual paperwork with clients.

“For most of the firms that we talk, to that will fall at some point in the first quarter of next year.

“So the industry has been talking in public and to the government about a transition period, because apart from anything else what they want is to have longer to see where the deal is likely to emerge, so they can understand they are planning for a likely outcome and not spending money and inconveniencing clients in a way that may be unnecessary.”